Tax Credit For Business-Supported Child Care
R.S. 47:6107
Businesses that support quality child care are eligible for a refundable tax credit based on the quality rating of the center. Eligible support includes:
Expenses to construct, renovate, expand, or repair an eligible child care center, purchase equipment for a center, maintain or operate a center, not to exceed $50,000 in expenses per tax year;
Payments made to an eligible child care facility for child care services to support employees, not to exceed $5,000 per child per tax year; and/or
The purchase of child care slots at eligible child care facilities actually provided or reserved for children of employees, not to exceed $50,000 per tax year
The credit is for a percentage of the eligible expenses based on the quality rating of the child care facility to which the expenses are related or the rating of the child care facility that the child attends as follows:
Quality Rating of Child Care Facility Effect on Eligible Expense Percentage Quality Rating of Child Care Facility Percentage of Eligible Expenses Five Star 20% Four Star 15% Three Star 10% Two Star 5% One Star or not participating in Quality Start 0%
The refundable credit can be taken against individual income tax, corporation income tax, or corporation franchise tax depending on the business’s entity type as follows:
Individual income tax credit — If the business providing the support is owned by a sole proprietor or a flow-through entity such as a Limited Liability Company (LLC), Partnership, or Subchapter S corporation, the credit will be claimed on the Resident Individual Income Tax return, Form IT-540, Schedule F, or the Nonresident and Part-Year Resident Individual Income Tax Return, Form IT-540B, Schedule F-NR. Partners and shareholders should apportion the credit based on each partner’s or shareholder’s percentage of ownership.
Corporation income or franchise tax credits — If the business providing the support is a corporation, the credit will be claimed on the Corporation Income and Franchise Tax Return, Form CIFT-620, Schedule RC.
Nonprofit Organizations — If the business providing the support is a nonprofit organization, the tax credit must be taken on the Corporation Income and Franchise Tax Return, Form CIFT-620, Schedule RC. Nonprofit organizations that are not registered with LDR because they are exempt from tax must register with LDR for corporation income tax and obtain a Louisiana revenue account number to be able to claim the credit.